This paper explores the effect of exclusionary ethical investing on corporate behavior in a risk-averse, equilibrium setting. While arguments exist that ethical investing can influence a firm's cost of capital, and so affect investment, no equilibrium model has been presented to do so. We show...

We model a market in which some investors get utility from owning shares of firms that engage in corporate social responsibility (CSR). In equilibrium, investors' CSR considerations influence portfolio choices, stock prices, and CSR spending. We study tax policy designed to maximize total giving...

type="main" xml:lang="en" <title type="main">ABSTRACT</title> <p>We develop a multiperiod rational expectations model of securities market equilibrium in which equilibrium prices may move between periods even though it is common knowledge that no new information has arrived about ultimate security payoffs. This happens...</p>

We present two ways in which trading in a replicatable option can affect the price process of the underlying asset. in the first situation, trading an option that each investor views as pay-off redundant breaks a non-fully revealing equilibrium that exists when the option market is absent. The...